Papers in Evolutionary Economic Geography

January 7, 2017

# 17.01 When Buzz and Pipelines Fail

Filed under: 2017 — mattehartog @ 5:01 pm

Christopher R. Esposito, David L. Rigby

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Explanations for why some cities outperform others frequently rest on the assumed benefits of local and global interaction. Within the “buzz and pipelines” literature, the costs and returns to interaction have rarely been examined in formal settings. In this paper we extend research on knowledge sharing by modeling local and global interactions between firms distributed across city-regions. Our simulation model develops an evolutionary framework where firms explore and exploit knowledge sets that are accumulated over time by recombining technologies held by local and non-local firms. Our results make two contributions to the existing literature. First, we show why too much local interaction can induce technological lock-in and restrict cities’ innovative growth. Second, we illustrate that non-local interaction entails opportunity costs that can outweigh its benefits. Together, the results unearth the conditions under which local and non- local interactions strengthen the economies of cities and when they fail to do so.

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